On August 1, 2024 Arbutus Biopharma Corporation (Nasdaq: ABUS) ("Arbutus" or the "Company"), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop a functional cure for people with chronic hepatitis B virus (cHBV) infection, reported second quarter 2024 financial results and provides a corporate update (Press release, Arbutus Biopharma, AUG 1, 2024, View Source [SID1234645246]).
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"At the EASL Congress we reported impressive imdusiran data. I’m particularly excited that in the IM-PROVE I clinical trial we saw undetectable HBsAg in 67% of those patients with baseline HBsAg less than 1000 IU/mL who were treated with 48 weeks of imdusiran and 24 weeks of IFN," said Michael J. McElhaugh, Interim President and Chief Executive Officer of Arbutus Biopharma. "In addition, these patients stopped all therapy and in early follow-up have maintained undetectable HBsAg and HBV DNA, a precursor to a functional cure. With these encouraging data, we continue to be optimistic about imdusiran as a potential cornerstone therapeutic in a treatment regimen to functionally cure cHBV."
Mr. McElhaugh continued, "We intend to focus our existing resources on conducting a Phase 2b clinical trial with imdusiran, assuming continued positive data. This has the potential to create a true inflection point for both Arbutus and HBV patients. To ensure we have the resources to conduct such a program, we have made the difficult decision to discontinue our HBV research efforts and reduce our headcount leading to a projected cash runway into the fourth quarter of 2026. I want to express my sincere gratitude to those impacted by the workforce reduction for their invaluable contributions to our mission and their dedication to helping HBV patients."
Clinical Development Update
Imdusiran (AB-729, RNAi Therapeutic)
At the EASL Congress in June, end-of-treatment data was presented from IM-PROVE I (AB-729-201), a Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of the combination of imdusiran, nucleos(t)ide analogue (NA) therapy and pegylated interferon alfa-2a (IFN) in patients with cHBV. The data showed that 33.3% (n=4/12) of patients in Cohort A1 receiving 48 weeks of imdusiran combined with a short course of IFN (24-weeks) and NA therapy, achieved undetectable HBsAg at the end-of-treatment that was maintained in 100% of these patients 24 weeks after completing imdusiran and IFN treatment. Undetectable HBsAg was achieved in 67% of those patients with HBsAg less than 1000 IU/mL at baseline. A total of six patients who received 24 weeks of IFN (n=4 Cohort A1; n=2 Cohort A2) seroconverted, with HBsAg loss accompanied by high titers of anti-HBsAg antibodies. All six of these patients have stopped NA therapy, with two of those patients reaching 12 weeks off all therapy with sustained undetectable levels of HBsAg and HBV DNA. The combination of imdusiran and IFN in this clinical trial was generally safe and well-tolerated.
Also at the EASL Congress in June, end-of treatment data was presented from the IM-PROVE II (AB-729-202) Phase 2a clinical trial evaluating the safety and immunogenicity of imdusiran, NA therapy and Barinthus Bio’s VTP-300, an HBV antigen-specific immunotherapy. The data showed that at 24-weeks post-end of treatment with imdusiran and VTP-300, statistical significance (p<0.05) was achieved in HBsAg levels between the treatment arm (n=5) and placebo (n=6). In addition, more patients maintained HBsAg thresholds of <100 IU/mL and <10 IU/mL when administered VTP-300 vs. placebo at 24-weeks post end-of-treatment. The combination of imdusiran and VTP-300 in this clinical trial was generally safe and well-tolerated.
IM-PROVE II includes an additional cohort of patients who will receive imdusiran plus NA therapy for 24 weeks followed by VTP-300 plus up to two low doses of nivolumab, an approved anti-PD-1 monoclonal antibody. Arbutus is on-track to report preliminary end-of-treatment data from this additional cohort in the second half of 2024.
Arbutus has terminated its Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of imdusiran and NA therapy in combination with intermittent low doses of durvalumab, an approved anti-PD-L1 monoclonal antibody (IM-PROVE III, AB-729-203) prior to dosing any participants. This decision was based on a prioritization of resources and the projected availability of clinical data from this trial.
AB-101 (Oral PD-L1 Inhibitor)
AB-101-001 is a Phase 1a/1b double-blind, randomized, placebo-controlled clinical trial designed to investigate the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV. Part 1 of the clinical trial has enrolled four sequential cohorts of eight healthy subjects each (6 active:2 placebo) to date, each receiving a single dose of AB-101 at increasing dose levels up to 25 mg or placebo. Data from Part 1 of this trial showed that AB-101 was generally well-tolerated with evidence of dose-dependent receptor occupancy. In the 25 mg cohort, all five evaluable subjects showed evidence of receptor occupancy between 50-100%. Arbutus has moved into Part 2 of this clinical trial which evaluates multiple-ascending doses of AB-101 in healthy subjects and expects to report preliminary data in the second half of this year.
Corporate Updates
The Company has made the decision to streamline the organization to focus its efforts on advancing the clinical development of imdusiran and AB-101, and is therefore ceasing all discovery efforts and discontinuing its IM-PROVE III clinical trial. In taking these steps to streamline the organization, Arbutus is implementing a reduction in its workforce of 40%, primarily affecting the discovery and general and administrative functions. As a result, Arbutus will incur a one-time restructuring charge of approximately $3.0 – $4.0 million that will be recorded in the third quarter of 2024. With these organizational changes and its ongoing cost management efforts, the Company now expects its current cash, cash equivalents and investments in marketable securities will be sufficient to fund operations into the fourth quarter of 2026.
LNP Litigation Update
Next steps in the lawsuit against Moderna include expert reports and expert depositions. A trial date has been set for April 21, 2025, and is subject to change.
The lawsuit against Pfizer/BioNTech is ongoing and a date for a claim construction hearing has not been set.
Arbutus continues to protect and defend its intellectual property, which is the subject of the on-going lawsuits against Moderna and Pfizer/BioNTech. The Company is seeking fair compensation for Moderna’s and Pfizer/BioNTech’s use of its patented LNP technology that was developed with great effort and at a great expense, without which Moderna’s and Pfizer/BioNTech’s COVID-19 vaccines would not have been successful.
Financial Results
Cash, Cash Equivalents and Investments
As of June 30, 2024, the Company had cash, cash equivalents and investments in marketable securities of $148.5 million compared to $132.3 million as of December 31, 2023. During the six months ended June 30, 2024, the Company used $33.8 million in operating activities, which was offset by $44.1 million of net proceeds from the issuance of common shares under its "at-the-market" offering program (ATM Program). The Company expects its 2024 cash burn to range from $63 million to $67 million. With the organizational changes announced today, the Company believes its cash, cash equivalents and investments in marketable securities will be sufficient to fund its operations into the fourth quarter of 2026.
Revenue
Total revenue was $1.7 million for the three months ended June 30, 2024 compared to $4.7 million for the same period in 2023. The decrease of $3.0 million was due primarily to: i) a decrease in license revenue recognized under our licensing agreement with Qilu Pharmaceutical; and ii) a decrease in license royalty revenue from Alnylam due to lower sales of ONPATTRO in 2024 compared to 2023.
Operating Expenses
Research and development expenses were $15.6 million for the three months ended June 30, 2024 compared to $17.7 million for the same period in 2023. The decrease of $2.1 million was due primarily to the discontinuation of the Company’s coronavirus and AB-161 programs in September 2023 as part of its efforts to focus on its lead HBV product candidates, partially offset by an increase in clinical expenses for the Company’s AB-101 Phase 1a/1b clinical trial and its multiple imdusiran Phase 2a clinical trials. General and administrative expenses were $7.5 million for the three months ended June 30, 2024 compared to $6.0 million for the same period in 2023. The increase of $1.5 million was due primarily to higher litigation costs, partially offset by a decrease in compensation-related expenses.
Net Loss
For the three months ended June 30, 2024, the Company’s net loss was $19.8 million, or a loss of $0.11 per basic and diluted common share, as compared to a net loss of $17.1 million, or a loss of $0.10 per basic and diluted common share, for the three months ended June 30, 2023.
Outstanding Shares
As of June 30, 2024, the Company had approximately 188.7 million common shares issued and outstanding. In addition, the Company had approximately 20.5 million stock options and unvested restricted stock units outstanding as of June 30, 2024. Roivant Sciences Ltd. owned approximately 21% of our outstanding common shares as of June 30, 2024.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share and per share data)
Three Months Ended March 31, Six Months Ended June 30,
2024 2023 2024 2023
Revenue
Collaborations and licenses $ 1,155 $ 3,885 $ 2,094 $ 9,394
Non-cash royalty revenue 571 766 1,164 1,944
Total revenue 1,726 4,651 3,258 11,338
Operating expenses
Research and development 15,551 17,692 30,954 35,967
General and administrative 7,547 5,980 12,859 11,532
Change in fair value of contingent consideration 211 (636 ) 391 (363 )
Total operating expenses 23,309 23,036 44,204 47,136
Loss from operations (21,583 ) (18,385 ) (40,946 ) (35,798 )
Other income
Interest income 1,829 1,461 3,374 2,729
Interest expense (34 ) (171 ) (78 ) (369 )
Foreign exchange gain (8 ) 1 (21 ) 5
Total other income 1,787 1,291 3,275 2,365
Net loss $ (19,796 ) $ (17,094 ) $ (37,671 ) $ (33,433 )
Loss per share
Basic and diluted $ (0.11 ) $ (0.10 ) $ (0.21 ) $ (0.20 )
Weighted average number of common shares
Basic and diluted 188,041,489 166,063,284 181,842,519 163,855,661
Comprehensive loss
Unrealized gain on available-for-sale securities 63 166 113 1,020
Comprehensive loss $ (19,733 ) $ (16,928 ) $ (37,558 ) $ (32,413 )
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2024 December 31, 2023
Cash, cash equivalents and marketable securities, current $ 141,986 $ 126,003
Accounts receivable and other current assets 6,234 6,024
Total current assets 148,220 132,027
Property and equipment, net of accumulated depreciation 4,059 4,674
Investments in marketable securities, non-current 6,527 6,284
Right of use asset 1,237 1,416
Total assets $ 160,043 $ 144,401
Accounts payable and accrued liabilities $ 11,108 $ 10,271
Deferred license revenue, current 11,034 11,791
Lease liability, current 453 425
Total current liabilities 22,595 22,487
Liability related to sale of future royalties 5,859 6,953
Contingent consideration 7,991 7,600
Lease liability, non-current 1,144 1,343
Total stockholders’ equity 122,454 106,018
Total liabilities and stockholders’ equity $ 160,043 $ 144,401
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended June 30,
2024
2023
Net loss $ (37,671 ) $ (33,433 )
Non-cash items 3,973 2,911
Change in deferred license revenue (757 ) (7,128 )
Other changes in working capital 656 (9,210 )
Net cash used in operating activities (33,799 ) (46,860 )
Net cash provided by investing activities 21,523 18,119
Issuance of common shares pursuant to the Open Market Sale Agreement 44,124 24,604
Cash provided by other financing activities 4,676 555
Net cash provided by financing activities 48,800 25,159
Effect of foreign exchange rate changes on cash and cash equivalents (21 ) 3
Increase/(decrease) in cash and cash equivalents 36,503 (3,579 )
Cash and cash equivalents, beginning of period 26,285 30,776
Cash and cash equivalents, end of period 62,788 27,197
Investments in marketable securities 85,725 136,344
Cash, cash equivalents and marketable securities, end of period $ 148,513 $ 163,541
Conference Call and Webcast Today
Arbutus will hold a conference call and webcast today, Thursday, August 1, 2024, at 8:45 AM Eastern Time to provide a corporate update. To dial-in for the conference call by phone, please register using the following link: Registration Link. A live webcast of the conference call can be accessed through the Investors section of Arbutus’ website at www.arbutusbio.com.
An archived webcast will be available on the Arbutus website after the event.
About Imdusiran (AB-729)
Imdusiran is an RNA interference (RNAi) therapeutic specifically designed to reduce all HBV viral proteins and antigens including hepatitis B surface antigen, which is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to the virus. Imdusiran targets hepatocytes using Arbutus’ novel covalently conjugated N-Acetylgalactosamine (GalNAc) delivery technology enabling subcutaneous delivery. Clinical data generated thus far has shown single and multiple doses of imdusiran to be generally safe and well-tolerated, while also providing meaningful reductions in hepatitis B surface antigen and hepatitis B DNA. Imdusiran is currently in multiple Phase 2a clinical trials.
About AB-101
AB-101 is our oral PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade while minimizing the systemic safety issues typically seen with checkpoint antibody therapies. Immune checkpoints such as PD-1/PD-L1 play an important role in the induction and maintenance of immune tolerance and in T-cell activation. Preclinical data generated thus far indicates that AB-101 mediates re-activation of exhausted HBV-specific T-cells from cHBV patients. We believe AB-101, when used in combination with other approved and investigational agents, could potentially lead to a functional cure in patients chronically infected with HBV. AB-101 is currently being evaluated in a Phase 1a/1b clinical trial.
About HBV
Hepatitis B is a potentially life-threatening liver infection caused by the hepatitis B virus (HBV). HBV can cause chronic infection which leads to a higher risk of death from cirrhosis and liver cancer. Chronic HBV infection represents a significant unmet medical need. The World Health Organization estimates that over 250 million people worldwide suffer from chronic HBV infection, while other estimates indicate that approximately 2.4 million people in the United States suffer from chronic HBV infection. Approximately 820,000 people die every year from complications related to chronic HBV infection despite the availability of effective vaccines and current treatment options.